Over the last year, video game publishers' lobbying group the Entertainment Software Association has lost a quarter of its members. New financial data reported by Gamespot may shed some light on just why the defections have occurred.

Back in 2007 - at the demand of its member companies - the ESA scaled back its annual E3 show, reducing the number of attendees from more than 60,000 to around 5,000. Despite the downsized event pulling in nearly $15 million less than in 2006, the ESAʼs 2007 revenue dropped less then $1 million, thanks to hefty membership fee increases - 1700% hefty.

Dues collected for the year of the Santa Monica E3 (April 1, 2007 - March 31, 2008) rang up at $17.41 million; the prior year's total was $4.47 million. The year before that, the ESAʼs total income from member fees was just over $1 million.

Although NCsoft has gone on record that its decision not to renew its 2009 membership with the ESA was not financially motivated, itʼs a good bet that for some of the memcos (including financially-battered Midway), money was indeed a big factor.

For its part, the ESA told Gamasutra that it's revisiting its membership dues structure in addition to aiming for a bigger, better, and more profitable E3 2009. Said ESA CEO Mike Gallagher (left):

The positive restructuring of the E3 Expo allowed us to revisit the ESAʼs dues structure. It is our hope that this new model will make the ESA an attractive and accessible option for small and mid-sized publishers so we can more fully represent our industryʼs diversity.

The 9th Circuit Court has affirmed a U.S. District Court decision which struck down California's 2005 violent video game law.

As GamePolitics reported last November, a three-judge panel of the 9th Circuit heard the state's appeal in Sacramento. In upholding the District Court's 2007 ruling, the 9th Circuit rejected several research studies presented by the states as failing to demonstrate a causal link between violent video game play and negative behavior:

Nearly all of the research is based on correlation, not evidence of causation, and most of the studies suffer from significant, admitted flaws in methodology.

The Court also rejected as unconstitutional a section of the law requiring retailers to label violent games with a four-inch square label with "18" printed on it.

Reactions to the ruling are beginning to come in. Jennifer Mercurio, Director of Government Affairs for the Entertainment Consumers Association, said:

We couldn’t be happier. Federal courts have found all nine legislative attempts to curtail the sale of violent video games invalid under the First Amendment, definitively showing that video games are protected speech, just like other content such as books, comic books, movies and music.

Bo Andersen, CEO of game retailers' group the Entertainment Merchants Association, said:

Retailers are committed to assisting parents in assuring that children do not purchase games that are not appropriate for their age. Independent surveys show that retailers are doing a very good job in this area, with an 80% enforcement rate, and retailers will continue to work to increase enforcement rates even further. The court has correctly noted that the state cannot simply dismiss these efforts.

I understand that some government officials will push for the state to ask the U.S. Supreme Court to review this decision. The state should not acquiesce in this demand, particularly in light of its budget difficulties. The state has already wasted too many tax dollars, at least $283,000 at last count, on this ill-advised, and ultimately doomed, attempt at state-sponsored nannyism.

The Entertainment Software Association, which lobbies on behalf of U.S. video game publishers, is an IIPA member. Indeed, much of the IIPA's angst with our friends to the north seems to revolve around Canada's more tolerant attitude toward mod chips. From the L.A. Times:

In particular, the IIPA wants Canada to do more to block the manufacture and sale of video game "mod" chips and other equipment to circumvent electronic locks; raise the statutory penalties for unauthorized copying, even when it's done for personal use; crack down on the manufacture and sale of bootlegged DVDs; and require ISPs to take down infringing material upon request, rather than simply passing a notice of infringement on to the customer responsible for it.

The Bush administration essentially blew off the IIPA's previous entreaties to target Canada. It's doubtful that the group will have any better luck with the Obama team.

Meanwhile, as we were preparing this story, the ESA dropped a press release on the topic with the obligatory doom-and-gloom piracy quote from CEO Mike Gallagher:

Piracy is the single greatest threat to the innovation, artistic commitment and technological advancements enjoyed by millions of consumers worldwide. Piracy is a job killer that the world economy cannot afford in these difficult economic times. Countries that skirt obligations to combat piracy need to understand the unacceptable damage they are facilitating —and those countries that invest in protecting intellectual property rights and ensure that piracy is not tolerated at any level should be lauded.

The ESA also cited what it termed "alarmingly high volumes of illegal game downloads" on P2P networks BitTorrent and eDonkey.

The declaration is apparently the first of its kind in the United States.

In addition, both chambers of the Texas legislature have passed resolutions recognizing the video game industry's contributions to the Lone Star State. Those resolutions were sponsored by State Sen. Bob Duell (R) and Rep. Dawnna Dukes (D), both of whom have worked on financial incentives for Texas game developers in the past.

The news comes by way of a press release from the Entertainment Software Association. The trade group which represents U.S. video game publishers enjoys a strong connection to Gov. Perry. GamePolitics readers will recall that the Guv delivered the keynote speech at E3 2008.

ESA CEO Mike Gallagher commented on the Texas-sized salute to the game biz:

The support of Governor Perry, Senator Duell and Representative Dukes for the entertainment software industry in Texas is an endorsement of the artistic and economic contributions our industry has made to the state.

These lawmakers are helping grow our industry as we work to create new jobs for Texans; boost the state’s economy; and help discover new ways computer and video games can improve the ways Americans live, work and play.

According to the ESA, Texas's game industry adds $395 million to the state's economy.

On the very same day GamePolitics broke the news that NCsoft had dropped its membership in the Entertainment Software Association, Mike Gallagher, CEO of the game publishers trade association, predicted that new, "exciting" member companies would join the ranks of the ESA.

Gallagher's comments came during an appearance on C-SPAN's The Communicators on Saturday.

Gallagher was interviewed by C-SPAN's Pedro Echevarria along with Mike Musgrove, who often writes about games for the Washington Post.

The half-hour program, which touched on a number of issues, is worth a look. Here are samples of Gallagher's comments:

How the ESA looks at the incoming Obama Administration:

If you look at President-elect Obama's technology platform, he specifically calls out protection of intellectual property overseas, but also protection of intellectual property at home. So, we're encouraged by what we see there. We also just had the PRO-IP act passed which places an intellectual property coordinator in the White House. So, we're very encouraged by that...

[Game cosnumers] see great value in paying the price points for the software that we make... We're in a far different position than music... Our companies have seen that threat coming and we've built some protections in. We also have a better value equation with our consumer and with our customer so we look to foster and grow that as our primary means of defeating piracy, making sure it's always worth it to buy the game, as opposed to burning it.

Whether industry self-regulation of its content rating system is working:

It's not me saying it, it's the Federal Trade Commission says it. In May they issued their report which was very strongly in favor of the industry. And then just recently, the National Institute on Media and the Family issued their annual assessment of the industry and gave the ESRB and retailers very high marks...

The future direction of ESA:

You'll continue to see a strong focus on federal and state policy... In the states, we're seeing tremendous opportunity. Gov. Rick Perry from Texas came to E3, our trade show... he came with the idea of attracting more of our [business]. Georgia, Louisiana, Michigan passed tax incentives to attract our industry...

Gallagher's comments on ESA member companies dropping out:

That was Activision's decision to leave... We have a mission on behalf of this industry that we're going to execute on... We continue to have good communication with [Activision], but we're moving forward. We're going to see some interesting changes this year when it comes to membership. I think we'll be adding some members that will be exciting for ESA as well as the industry... Whether certain companies are in or out or not doesn't really change our focus.

Near the end of the program, Gallagher gets busted doing a bit of subtle anti-Activision lobbying:

Musgrove: Please give me something I can walk away with here. I know these are both represented companies of yours, but - Rock Band 2 or Guitar Hero World Tour? They look kind of the same to me...

Gallagher: I've got to come down pretty heavily in favor of Rock Band 2. 84 tracks, it's a great product... Rock Band is really terrific...

Musgrove: Oh, wait a minute, Guitar Hero is from Activision and they're not in the ESA right now... (laughs)

When gamers last heard from Bill McCollum, the Florida Attorney General was fretting that the motion-controlled Wii version of Manhunt 2 would have a generation of kids practicing to be killers. As GamePolitics reported in June of 2007, McCollum apparently got that idea from Jack Thompson.

These days, McCollum is, like many political colleagues in other states, urging parents to follow ESRB content ratings while shopping for holiday gifts. A press release on his official website quotes the Republican A.G.:

Though the holiday season is one of the busiest times of year, it is also perhaps the most important time of the year for consumers to make sure they know what they're buying for their loved ones. The ESRB rating system provides parents and others with age and content information which can be informative tools when purchasing games for family and friends.

McCollum's press release also quotes ESRB head Patricia Vance as well as ESA CEO Michael Gallagher.

In an op-ed published at 1up, Michael Gallagher, CEO of game publishers trade group the Entertainment Software Association, frames the recent presidential election as "a historic time for America and the computer and video game community."

The campaign produced a milestone of its own in the use of our technologies to engage and communicate with voters.

For the first time, American gamers and the entertainment software industry played an active role in the political process...

With the U.S. recession deepening, Gallagher also cites the benefits that the game industry provides to the U.S. economy and lays out the ESAS's agenda going forward:

working closely with all levels of government

preserving the First Amendment rights of gamers

supporting parental education efforts around video game ratings

protecting our industry's intellectual property

leveraging broadband to increase the connected experience

working to improve our industry's contributions to the economy

supporting state-level tax incentive legislation

Gallagher concludes with:

We look forward to working with the Obama administration, the new Congress and state leaders around the country and ensuring that America's governments recognize the positive effects of the computer and video game industry.

The ESA Foundation, the charitable arm of video game publishers trade group the Entertainment Software Association, announced this week that it raised $750,000 for various children's charities at the organization's annual Nite to Unite.

The sold-out event was held on October 22nd in San Francisco. Legendary Nintendo game designer Shigeru Miyamoto (left) was honored with the 2009 ESA Champion Award.

The video game industry’s commitment to giving back is stronger than ever. For ten years now, Nite to Unite has been the premiere industry event dedicated to children’s causes and honoring its creative visionaries. I’m honored that so many distinguished individuals and organizations attended.

As reported by the Austin American-Statesman, that pretty much sums up what ESA CEO Michael Gallagher told the Greater Austin Chamber of Commerce during a recent visit to Texas. While praising a grant package for film makers and game developers passed in 2007, Gallagher rightly criticized:

...a content requirement about not disparaging Texas. Those types of speech restrictions in general are not viewed in favor by the courts. They tend to lead to a lot of problems down the road.

The ESA boss reminded the Chamber crowd that Texas Gov. Rick Perry (R) gave the keynote at this year's E3 (although he probably avoided mentioning how few E3 attendees showed up for the Guv).

The newspaper also mentions a concern that some Texas politicos have about providing grants to developers:

Legislators are warming to the idea of providing state funds to video game companies, but there is still some reluctance. Some fear that a political opponent could accuse them of voting to spend state funds on games like the violent "Grand Theft Auto."

As GamePoliticsreported yesterday, President Bush has signed into law a bill that, among other things, calls for the appointment of a cabinet-level IP czar.

Michael Gallagher, the former Bush administration official who heads video game industry lobbying efforts as CEO of the Entertainment Software Association (ESA), praised the move. In a press release issued by the ESA today, Gallagher said:

...The ESA applauds Congress and the Bush Administration for taking critical steps that support job growth and investment in the video game industry... More legitimate game sales mean more game-related jobs up and down the value chain.

Piracy is an enormously profitable undertaking for criminal organizations. Disabling those organizations requires a coordinated and cross-border approach to enforcement, which this legislation clearly promotes. Ultimately, this law provides for greater responsibility and accountability within the White House and in the multiple agencies responsible for advancing IP protection.

...the PRO IP Act is just another in a long line of "one-way ratchet" proposals that amplifies copyright without protecting innovators or technology users. One provision... seems aimed at allowing the music industry to threaten even higher statutory damages in its campaign to sue filesharers. Copyright law currently allows the RIAA to seek statutory damages per album, while the new law would allow them to seek damages per song. Under the new limits... someone who downloads each individual track from Guns N' Roses' 12-track Appetite for Destruction album could face a maximum statutory penalty of $360,000; as opposed to the current limit of $30,000 for the album.

The Entertainment Software Association has announced that Ed Desmond, senior vice president of Government Relations, is leaving the video game publishers lobbying group and taking an executive position with the Toy Industry Association.

Any organization is lucky to have such a dedicated and energetic advocate as Ed. His commitment to serving the public affairs needs of our member companies was unparalleled. He will be missed and we wish him all the best in his future endeavors.

While the ESA said that a search for Desmond's replacement is underway, GP has heard a rumor that Desmond's duties may be assumed by incoming General Counsel Kenneth Doroshow (of RIAA fame).

UPDATE: An ESA rep tells us that Doroshow will not be taking over Desmond's current responsibilities.

UPDATE 2: The TIA has issued a press release on Desmond's new duties...

As GamePolitics reported yesterday (see: ESA Happy to See Game Pirates Going to Jail), Fuchs copped a plea to federal charges that he was part of a warez group which shared pirated game software. He will begin an 8-month stretch in a federal prison soon, followed by another 8 months of house arrest.

So what did Kevin Fuchs do? The ESA's press release didn't specify, except to say that Fuchs supplied and tested software for his warez group. But GamePolitics has obtained a copy of Fuchs' indictment, which alleges that he targeted the following games and software products:

NCAA Football 2004 (Xbox)

NFL Street (Xbox)

MS Encarta Deluxe 2004

Unreal Tournament 2004

MS Windows 2000 Professional

Kill Bill, Vol. 2

Fuchs' role in his warez group was to download software cracked by other members, test to make sure it worked properly, and then re-upload it for distribution. He also supplied "key generators," software which creates access keys for copyrighted software.

While the FBI alleges Fuchs committed piracy for personal gain, his indictment reads more like that of a gardern-variety warez kid. Even the feds acknowledge this aspect of the warez scene in the indictments's introductory paragraphs:

Other motives in addition to profit include the thrill and social comradery members obtain through clandestine participation in the illegal activity; and the reputation and fame that attends membership and participation in the "top" warez groups.

Indeed, if Fuchs was in it for the money, it wasn't working. A March, 2008 motion filed by Fuchs' attorney with the U.S. District Court for the Western District of North Carolina (where the case originated) asks for a continuance of Fuchs' sentencing because he and his parents could not afford to travel from New York to North Carolina.

The motion also notes that Fuchs has apparently engaged in efforts to rid himself of the pirate's stain:

Professor William Haslinger, of the Hilbert College Economic Crime Investigation Department located in Hamburg, New York... has worked with Fuchs since his arrest and plea to enhance awareness of the illegality and economic harms associated with digital downloading of music and software via the internet, which remains widespread and is often perceived as legal activity. Professor Haslinger will provide evidence of Fuchs’ post offense rehabilitation and his participation as a speaker in forums for college students regarding the illegality downloading and what can happen if you are caught.

But the software publishers' lobbying group dramatically increased its political donations in the second quarter of of the year.

Using publicly available records, GamePolitics has learned that the ESA wrote checks totaling $19,000 to 17 separate candidates for the U.S. House and Senate. Two U.S. Senators received $2,000 campaign donations, while the remaining 15 recipients each received $1,000.

All recipients are incumbents. Seven senatorial and ten congressional campaigns received donations. Nine recipients are Democrats and eight are Republicans.

MCVUK writes that Entertainment Software Association CEO Michael Gallagher (left) endorsed the Pan-European Game Information (PEGI) rating system over that of the British Board of Film Classification (BBFC) during last week's state-of-the-industry speech at E3 in Los Angeles.

From the MCVUK report:

As part of his keynote speech, Gallagher was critical of the Byron Report’s highly controversial backing of the BBFC system – and made it clear that the Entertainment Software Association believes it was the wrong way to go.

MCVUK is referring to this section of the Gallagher speech:

Friends and allies across the globe are facing their own challenges. Our success as a business and entertainment medium has caught the attention and the interest of foreign regulators and governments. Earlier this year we saw the release of the Byron Report, which praised the ESRB's work with retailers to help enforce sales restrictions to minors. We are now seeing a robust debate between the BBFC and PEGI. And while this is a European question requiring a European solution, our American experience proves that industry self-regulation is the best way to provide parents the information they need to make appropriate purchasing decisions.

Frankly, we're not reading Gallagher's remarks as expressing criticism of the Byron Review, although the ESA head's preference for self-regulation is clear. On the other hand, it would be natural for the ESA to back PEGI, as its UK game industry counterparts, including publishers' group ELSPA, have expressed a clear distaste for handing game rating responsibilities over to the BBFC.

We've got a request in to the ESA for clarification on Gallagher's view. In the meantime, you can read the full text of Gallagher's E3 speech here.

Calling this year's show a "complete dud," Ben Kuchera of Ars Technica weighs in with his own four-point program for reviving the once-great expo:

Take pride in outward appearances... A few banners for big-name games, some creativity in the meeting rooms... these things would go a long way towards getting people excited about the show.

The keynote should be given by someone we want to hear from... Texas Governor Rick Perry delivered this year's keynote, and it sounded more like a commercial for Texas than analysis into the industry... Give us someone who actually makes games, who can speak to why we love this business... How can a show that is completely filled with interesting games and fascinating people have a keynote so stupefyingly boring?

If you have a press conference, make it worth going to... Sitting through a press conference, in most cases, is a waste of time that you could spend getting more hands-on experience or talking to people. It's easier and quicker to skip the meeting, grab the press materials, and be done with it.

Find a new, better venue. Hint: it doesn't have to be in LA... Why not move it? ...From a social, technological, and even convenience standpoint, Vegas has it all over the Los Angeles convention center.

In his critique of E3, Peter Cohen of MacWorld focuses on game publishers, the ESA and its president, Michael Gallagher:

Last week the E3 [expo]... took place, but you probably wouldn't have known it unless you're in the video game business... the event came up short... and the shortcomings weren't missed or overlooked by gaming executives... They miss the spectacle of the old show... They miss the grandeur, the attention the world paid. In short, they miss some of the same things that, two years ago, they were complaining about.

The ESA [which runs E3] has had a tough year. The organization, which represents the video game industry on Capitol Hill... has lost several high-profile members... Some attribute the defections to a change in leadership... Doug Lowenstein, the organization's founder and former president, stepped down in 2007... [and] was replaced by Michael Gallagher, a refugee from the telecom industry who maintains a much lower profile than Lowenstein ever did...

There's certainly a place for a major gaming event in North America... One thing is for sure--the way [the game industry is] doing it just isn't working for anyone, not the industry, not the public, not the press.

ESA CEO Michael Gallagher (left) addressed the E3 crowd for the first time yesterday afternoon. Gallagher, hired in May, 2007, opted out of speechifying at last July's E3 in Santa Monica, citing newness in the position.

Yesterday's 2008 state-of-the-industry address was a workmanlike effort that had no major high or low points.

Although not seemingly a natural public speaker, Gallagher delivered a credible performance which would have been helped greatly by a warmer venue and better attendance. By our estimate, only 75-100 people caught Gallagher's speech, delivered in a cavernous meeting room at the Los Angeles Convention Center. Why not utilize the LACC's cozy theater, as the ESA has in years past?

The biggest disappointment in our view was that there was no audience Q&A following Gallagher's address. The ESA boss did, however, field one-on-one questions from media types after his talk.

Gallagher termed the current era the "golden age" of gaming and made five recommendations for going forward:

Remember our base. Never forget our loyal fanbase. We must continually push forward and look for new tech to keep them interested and involved.

Welcome new gamers. Welcome in converts who've joined us recently, continue to serve them, as well.

Broaden the use of games. Remembering it is still play, games are increasingly not just recreational. And this is a good thing and a growth trend that must be protected and strengthened.

Help parents. We must continue to look for innovative ways to ensure games are parent-approved. All hardware providers include parental controls; this a great step. They now need education on how to use parental tools such as these controls.

We must unite to support our policy interests.

The "remember the base" remark is oddly remiscent of partisan politics. Gallagher, of course, was a Bush Administration official before taking the helm at ESA. Although GameSpot felt that Gallagher took a shot at his predecessor, Doug Lowenstein with this remark:

In my predecessor's time, our organization was fighting politicians, not having them embrace us.

...we didn't take it that way, believing that Gallagher was simply commenting on the times. After all, if politicians have learned that they can't successfully legislate game content, those battles were either won or begun on Lowenstein's watch.

As with Gov. Perry's keynote, I live-blogged Gallagher's speech on Twitter. I've pasted those observations in after the jump. Once again, these are unedited SMS messages, entered via mobile phone. Please forgive misspellings, punctuation, etc.

That was the situation in which Texas Gov. Rick Perry (R) found himself at E3 yesterday. Despite being selected as the first political figure to keynote the ESA's annual trade show, Perry attracted an audience estimated to have been between 50-60 people, including ESA employees. The sparse attendance was accentuated by the cavernous room reserved for the speech, which was set up with hundreds and hundreds of chairs.

Despite the lack of onlookers, the Guv soldiered on, delivering in his folksy style a credible speech touting the benefits of running a business in Texas, the creativity and success of the video game industry and touting the Lone Star State as a great spot for game developers to set up shop.

Following his speech, Perry was escorted (left) by ESA boss Mike Gallagher to the small space that passed for a show floor where he viewed some displays and spoke with G4's Adam Sessler. As he was leaving, we thought we heard someone say that he was headed for EA next. Perhaps the Guv was hoping to persuade EA to bring some biz to Texas.

So why didn't anyone show up for the keynote, an obvious embarrassment for the ESA? There are several possibilities:

The show had already opened when the Guv spoke. In years past, the keynote opened the show. Pent-up E3 enthusiasm would find its first outlet at the keynote because there was nothing else competing with it. The room was always packed.

The ESA used to put out a breakfast of some sort for the media types just prior to the keynote, always a solid strategy to lure a pack of perpetually broke game journos.

Attendance at the show was perhaps 5% of what it once was. Naturally, there are fewer potential attendees for any single event.

Some people may not have wanted to hear from a politician in general; some may not wanted to hear from Gov. Perry specifically

Although there was no question & answer segment such as former ESA boss Doug Lowenstein used to hold following his keynotes, I really wasn't expecting a major political figure Like Perry to hold a Q&A in this setting.

While on hand at the keynote I live-blogged my immediate impressions via Twitter. These have been pasted in after the jump.

Among his remarks, Gallagher took a rare shot at embattled anti-game attorney Jack Thompson, telling Takahashi:

[Thompson] is in the rear view mirror... The bright future that lies in front of us does not include Jack Thompson...

Naturally, we couldn't resist asking the volatile Thompson for his reaction to Gallagher's remarks. In an e-mail to Gallagher, cc'd to GamePolitics, Thompson wrote:

Dear Mike:

I really enjoyed your "Jack Thompson is in the rearview mirror" comment. I think it is a reasonable thing to say, based upon what you think you know about what is going on between me and The Florida Bar, but in fact it is not accurate. You don't know what is going on behind the scenes.

What I would like you to know, however, is that I plan to file a lawsuit this week against the ESA. It's about time. If you think my current, soon to be past, Bar problems are an impediment to that suit, think again...

I look forward to the entire video game industry having the ESA and the ESRB in its rearview mirror. That should be accomplished soon.

GP: The lawsuit of which Thompson speaks is apparently some type of RICO allegation. We've asked for more details but are taking a wait-and-see attitude as to whether this one ever happens. Not every lawsuit Thompson threatens actually gets filed, and this one in particular has the whiff of a non-starter.

Thompson also sent Gallagher the picture included in this report, which is, we have to admit, an amusing touch.

Getting all of the Thompson news out of the way so we can focus on E3, the controversial barrister has - not unexpectedly - filed several motions with the Florida Supreme Court, objecting to last week's report by Judge Dava Tunis which recommended that he be disbarred for life.

The interview comes on the eve of E3 and Takahashi fires some tough questions at Gallagher.

Highlights include:

VB: How did you choose the Texas governor, Rick Perry, for the other keynote?

MG: It makes complete sense Gov. Perry would be an invitee. Texas is a leading state when it comes to game development. They have an environment where they welcome the video game publishers and developers. They are reaping the economic benefit because of that... We’re delighted for the first time to bring such a high level politician to E3. It’s a sign of respect for the industry and maturity.

VB: The industry still has its share of political battles regarding censorship. How are those going?

MG: We are winning those but we are not out of the woods... There are many in the state and federal arenas that operate off a broken, flawed historical stereotype. That problem is a top priority for us. We’re trying to set a positive image for this industry and to make sure politicians understand it...

MG: He is in the rear view mirror... The bright future that lies in front of us does not include Jack Thompson...

VB: Some companies have dropped out of the ESA. There seem to be several reasons. Some may not get along with you. Some don’t like the higher dues...

MG: Who says they don’t get along with me?

VB: I can’t specifically answer that.

MG: I would press you on your sources. I haven’t heard that element come through where there is a personal disagreement with me, or, more importantly, there is a disagreement with the ESA’s mission. Every company that has left has embraced the ESA’s mission... When it comes to the ESA mission... we are making sure that the states and federal constituencies understand it...

The Entertainment Software Association took a victory lap this week, announcing the recovery of $65,000 in legal fees from Minnesota after the state abandoned further appeals of its failed 2006 video game law.

An editorial in yesterday's Duluth News-Tribune, however, dinged the ESA while acknowledging that Minnesota's fine-the-buyer legislation law was "flawed":

From the outset, the law skirted First Amendment rights and targeted the wrong people - minors... The logic was counter to that of more effective laws to protect minors, such as penalties to bars that allow underage drinking or fines to stores that sell cigarettes to kids.

...Though [Attorney General Lori] Swanson had indicated then she would continue to defend it, this week she cut her losses. Hence, the $65,000 of legal fees.

"Minnesota's citizens should be outraged at paying the bill for this flawed plan," Michael D. Gallagher, CEO of the video game trade association, said in a statement.

He's right, but what about his group's members who make and market games depicting sexual exploitation and violence as fun?

A little outrage is due there, too, for creating the problem in the first place.

The Entertainment Software Association, the trade group which represents the interests of US video game publishers, issued a press release today claiming that enrollment in its Video Game Voters Network has reached 150,000.

ESA president Michael Gallagher is quoted in the release:

VGVN members should be proud of their robust activity in support of computer and video games. These dedicated activists are crucial in efforts to fight back state government attempts to regulate computer and video games. With each political challenge, gamers stepped up and made their voices heard by elected officials. We know that from California to New York and state capitols in between, members of the VGVN directly contacted their representatives and expressed their opinions.

But, we can’t and won’t let up. As Americans go to the polls this fall, the gaming community is paying attention and will actively engage in the political process.

Politicians who think easy political points can be scored at the First Amendment’s expense need to know that such efforts will be aggressively opposed by the gamer community. VGVN members believe that parental education, not government regulation, is the way to ensure our children only have access to age-appropriate games.

Musgrove brings an interesting perspective to the piece, given that he wrote one of the early profiles of embattled ESA CEO Michael Gallagher last September. In response to Musgrove's questions about losing Activision, Vivendi, LucasArts and id as member companies, Gallagher said:

There are hundreds of trade associations in Washington and virtually all feature member turnover and the ESA is no exception.

Increased membership fees due to the scaling back of E3 may be part of the problem, Musgrove reports, quoting Wedbush-Morgan analyst Michael Pachter:

These [publishers] got rid of E3 so they wouldn't be spending money, and they suddenly find they are spending the same amount of money, but without the spectacle of E3. I can't comment on whether the ESA is effective or not, but clearly several members decided that this is not the kind of reward they expect for that amount spent.

For the industry's largest players, those fees could be $4.5 million or more per year. id CEO Todd Hollenshead also cited membership fees:

Our departure from ESA is probably temporary and was not political. It was just a question of other priorities this year that we wanted to focus on... [The ESA] is a credit to the industry.

Hal Halpin, president of the Entertainment Consumers Association (ECA), told Musgrove he knew of two other (unnamed) publishers that are planning to drop their ESA membership status:

Several [other publishers] are unhappy but remain with the organization... It's really concerning for all of us. Anyone who cares about the games business should be concerned about what's going on with the ESA.

Musgrove noted that Gallagher has maintained a relatively low profile since taking over the reigns, and that support was top-tier game publishers seems less effusive than it was in 2007:

[Gallagher's] been kind of quiet since that [September WaPo profile]... After a Fox News show featured an uninformed pundit going off about the allegedly sexually explicit nature of... Mass Effect, some gamers complained that the ESA did not step in to defend the game industry...

While top-ranking game industry executives were quick to get on the phone or respond to my e-mail queries about Gallagher last year, they weren't as chatty this year... Last year, Robbie Bach, head of Microsoft's game division, got on the phone to sing Gallagher's praises. This year, Microsoft sent me a statement: "We're as committed as ever to the ESA, and we look forward to participating in E3 this summer." Nintendo released a shorter, nine-word statement along the same lines.

For his part, Gallagher told Musgrove:

When it's necessary for the industry to have that loud, clear and public voice to defend itself from a baseless attack, I will be there.

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ZippyDSMlee: .....win8 hates any left over hidden install partitions from other version of windows....only waste 5 hours finding that out...its ahrder than you think keeping up with 4 or 5 HDDS......03/03/2015 - 4:44am

Matthew Wilson: I am going to pax east, any games you guys want me to check out?03/02/2015 - 11:23pm

ZippyDSMlee: No one remembers the days of Cinemagic and Cynergy eh? :P, meh even MGS is getting to film like....03/02/2015 - 8:44pm

MechaTama31: I was about to get all defensive about liking Metal Gear Solid, but then I saw that he was talking about "cinematic" as a euphemism for "crappy framerate".03/02/2015 - 8:29pm

prh99: Just replace cinematic with the appropriate synonym for poo and you'll have gist of any press release.03/02/2015 - 5:34pm

Monte: Though from a business side, i would agree with the article. While it would be smarter for developers to slow down, you can't expect EA, Activision or ubisoft to do something like that. Nintnedo's gotta get the third party back.02/28/2015 - 4:36pm

Monte: Though it does also help that nintendo's more colorful style is a lot less reliant on graphics than more realistic games. Wind Waker is over 10 years old and still looks good for its age.02/28/2015 - 4:33pm

Monte: With the Wii, nintnedo had the right idea. Hold back on shiny graphics and focus on the gameplay experience. Unfortunatly everyone else keeps pushing for newer graphics and it matters less and less each generation. I can barely notice the difference02/28/2015 - 4:29pm

Monte: ON third party developers; i kinda think they should slow down to nintendo's pace. They bemoan the rising costs of AAA gaming, but then constantly push for the best graphics which is makes up a lot of those costs. Be easier to afford if they held back02/28/2015 - 4:27pm

Matthew Wilson: http://www.forbes.com/sites/insertcoin/2015/02/28/the-world-is-nintendos-if-only-theyd-take-it/ I think this is a interesting op-ed, but yeah it kind of is stating the obvious.02/28/2015 - 2:52pm